Cyber Insurance

Cybersecurity insurance is designed to mitigate losses from a variety of cyber incidents including data breaches, network damage, and cyber extortion. Information Security professionals have seen cybersecurity insurance as an “effective, market-driven way of increasing cybersecurity” because it may help reduce the number of successful cyber attacks by:

  • promoting widespread adoption of preventative measures;    
  • encouraging the implementation of best practices by basing premiums on an insured level of self-protection;   
  • limiting the level of losses that companies face following a cyber attack.

Many universitites nevertheless forego cybersecurity or cyber-liability insurance altogether. They cite its perceived high cost, a lack of awareness about what it covers, and uncertainty that they’ll suffer a cyber attack as just some reasons for their decision.

Concerns about adopting cyber insurance include concerns about:

  • Defining Insurable and Uninsurable Cyber Risks:  What Harms Should It Cover and What Should It Cost?    
  • Cyber Insurance and the Human Element    
  • Cyber Liability:  Who is Responsible for What Harm?    
  • Current Cyber Risk Management Strategies and Approaches.

Specific examples of Cyber Insurance include Cyber Liability Insurance. Cyber Liability Insurance addresses the first- and third-party risks associated with e-business, the Internet, networks and informational assets. Cyber Liability Insurance coverage offers cutting edge protection for exposures arising out of Internet communications.

The risk category includes privacy issues, the infringement of intellectual property, virus transmission, or any other serious trouble that may be passed from first to third parties via the Web.

When should I consider Cyber Liability Insurance?

Anyone with a Web site now has the legal liabilities of a publisher.

The Internet - that technological wonder of worldwide communication - has spun a whole new “web” of liability exposures.

Creating a Web site is simple. Sharing research on the internet is simple. The exposures that come with it are not. Private researchers that venture onto the World Wide Web face liability exposures that are emerging, evolving, and complex.

Research communities that disseminate information to the public via Web sites face the same legal exposures as publishers, yet most have little or no concept of their resulting legal responsibilities. Moreover, new legislation continues to create potential liabilities, particularly in the areas of user privacy and domain name infringement.

Why consider Cyber Liability Insurance?

Traditional liability products do not address Internet exposures and the risks involved in Internet information sharing ventures have blossomed with the Net itself. That is why considering Cyber Liability Insurance is wise.

By disseminating information to the public via a website, researchers now have some of the same exposures as publishers. These include conventional publishing exposures such as copyright infringement, defamation and invasion of privacy, as well as emerging exposures related to operating on the Web.

The universe of potential plaintiffs is staggering, given the number of people and organizations that are currently surfing the Net. A potential legal action from just one of them could be costly. In a 1999 case, a company improperly used a sports celebrity’s name and photograph on its web site, and the celebrity sued for the “fair market value” of his name, plus additional damages of $750,000. Clearly, the potential liability associated with web site content is already great, still growing, and rapidly evolving.

For a researcher operating in today's high-tech world, universities provide internal and external email, however many researchers often have their own web site to disseminate providing information about their research.  Commercialization of intellectual property also brings with it the opportunity to advance into ecommerce ventures.  Accordingly, Cyber-Insurance is a handy risk mitigation strategy.

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